Gold prices slip to three-week low

Gold prices retreated at settlement today, Sept. 13, after the release of consumer price inflation data in the US, which raised fears of continued monetary policy tightening by the Federal Reserve.

In a statement issued by the White House, President Joe Biden said, ““Overall inflation has also fallen substantially over the last year, but I know last month’s increase in gas prices put a strain on family budgets."

The US dollar is poised to jump with Treasury yields in the coming months as still-elevated inflation will likely push the Federal Reserve toward further policy tightening, Bloomberg cited Acadian Asset Management’s Clifton Hill as saying.

Elsewhere, Goldman Sachs CEO David Solomon said the chances of the US economy avoiding a recession are “materially higher” than 12 months ago. He, however, cautioned that inflation may remain stubbornly high, the Financial Times reported.

The US Consumer Price Index (CPI), a closely watched inflation gauge, climbed by 3.7% in August from a year earlier — slightly hotter than the 3.6% annual rate economists were expecting, accelerating from July’s 3.2% hike.

Tomorrow, Sept. 14, the August reading for the Producer Price Index and us retail sales are scheduled to be out, providing more clues about the future path of monetary policy.

All eyes are on the European Central Bank's (ECB) policy meeting tomorrow, in light of a shift in market expectations to suggest a 75% uptick of 25 basis points in interest rates. This came after reports indicated that the central bank sees the Eurozone inflation to remain higher than 3% next year, Reuters reported.

Markets, according to CME FedWatch Tool, are pricing in a 97% chance that the Fed will hold steady to interest rates at the current 5.25-5.5% range at next week’s monetary policy meeting.

In terms of trading, bullion for December delivery fell by 0.15%, or $2.60, to close at $1,932.50 per ounce, marking the lowest settlement since Aug. 22.

The US dollar index, which measures the performance of the US currency against a basket of six major currencies, also decreased by 0.10% to stand at 104.61 points at 08:48 pm Makkah time, after climbing to 104.97 points in early trading.